Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017

50 Section DB 31 amended (Bad debts)

(1)

After section DB 31(2)(b), insert:

(bb)

the person is not associated with the debtor, or is associated with the debtor but the debtor has no deductions for the financial arrangement; and

(2)

In section DB 31(4B)(c), in the formula, replace “limited recourse consideration” with “limited recourse consideration + adjustment amount”.

(3)

In section DB 31(4C)(b), replace “financial arrangement.” with “financial arrangement:”, and after section DB 31(4C)(b), insert:

(c)

adjustment amount is an amount allocated for the income year under section EW 15D (IFRS financial reporting method) for the limited-recourse arrangement, to the extent to which the amount arises solely because of the reduction in the value of the limited-recourse arrangement due to the financial arrangement’s relevant bad debt amount.